The story is set in Victorian London. Mr Higgins is a professor of phonetics who bets against his friend Colonel Pickering that he can teach a Cockney speaking flower girl, Eliza Dolittle, to speak like a duchess in a few months. He plans to take her to high London society parties and make people believe that she is actually a duchess. Eliza moves in Higgins' house and starts her lessons. When Alfred Dolittle, Eliza's old and poor father, comes to his house to claim his daughter, Higgins gives him 5 pounds. Eventually Eliza passes all the tests which consist in visiting Higgins' mother's home and then the ambassador's party in which she successfully passes herself as a duchess.

Mr Higgins, who is a smart but cold person incapable to understand people, treats Eliza like an object and doesn't offer any praise after she transforms herself. Eliza grows frustrated and when he asks her to fetch his slippers she runs away to his mother's house.

In the beginning of act 5 Eliza's father appears again. He says after his first visit Mr Higgins had recommended him to a rich American of a Moral Reform Society as "the most original moralist in England". The American left him a rich monthly pension and now Mr Dolittle has reluctantly joined the middle class. In this monologue he complains of how, by becoming rich, people treat him differently and he has lost his freedom.